Although, there are no well-tested rules in this regard, yet a few elements of the strategy for outsourcing can be identified.

(a) Selectivity:

It is better to be selective in using outsourcing of application development services. One may select only those appli­cations that are not critical, need saving time and are not subject to frequent changes in the environment. It may not be advisable to outsource services relating to mission critical applications.

Simi­larly, for the services involving huge investment untried technolo­gies are also good candidates for outsourcing. However, the basis of selectivity shall be organisation specific and shall depend not only on the nature of business but also the basic approach of the top management and its broad policy framework.

(b) Defining contents of the package:

Another important aspect of outsourcing option is that of defining the contents of the outsourcing package and the standard of service that is expected at the price agreed upon. The fundamental principle in this regard is that nothing comes free’ and thus the contents of the outsourcing package should be minimized to reduce costs.

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Defining the con­tents here would also include defining what information is actu­ally required, when, where and how it can be generated. Outsourcing is beneficial and less risky when the client under­stands their requirements.

(c) Flexibility in the arrangement:

The arrangement with the con­sultant for application development should not contain terms that put the enterprise in an irreversible position. The arrangement should give flexibility to the enterprise to change scope of work, terms, etc. in the case of change in business situations.

(d) Control:

Outsourcing application development is no insur­ance against delay in development projects. Thus, control over the schedules of application development project is necessary for the client. As in most of the cases, major development work is performed at the consultant’s site. Thus, there is a need to ensure that the client enterprise has direct access to the site where the development work is to take place so that one can monitor the progress of the project.